Toyota Plans Upgrade for Lexus Brand

20 January 2004

Toyota's largest market, the US, is likely to shape the future development of its premium Lexus brand -- possibly on a global basis. The Japanese giant's American arm is mulling new models, with a view to taking the luxury brand even further upmarket.

In particular, Denny Clements, head of Lexus stateside and a senior executive at Toyota's sales unit in California, has his sights trained on BMW's 3 series with its dominance of prosperous younger buyers.

Of equal interest is Mercedes' current arm lock on buyers of luxury cars priced upward of $70,000 (€56,607; £39,197). The German carmaker has twelve model variants in this category; Toyota none.

These hitherto uncontested markets, Clements believes, "should give us a huge opportunity to grow Lexus." He envisages an entry-level luxury sports car plus one or more new models carrying a price ticket of $70K upward. This five year growth strategy, he hopes, will boost Lexus' sales (259,755 units in 2003) to 350,000 by 2008.

"It's important for us to be competitive in the entry-level luxury segment," Clements argues, eager to lasso those '30-something' consumers who currently buy BMW … "young professionals that are going to be luxury-car buyers for the rest of their lives."

Data sourced from: The Wall Street Journal Online; additional content by WARC staff